ETECSA receives permission from the central bank to convert mobile phone credit into electronic money

Money from the packages can be used to buy products and pay for services

ETECSA obtains permission from the Central Bank to convert mobile phone credit into electronic money (photo: Cuban newspaper)

The state-owned Cuban Communications Company (ETECSA) has obtained a license from the Central Bank (BCC) to convert mobile phone balance into electronic money, so that its customers can pay for some services in this way.

This business strategy, along with the existing telephone recharge system, could become another way to send direct remittances from various countries to Cuba, including the United States.

It also revealed the independent website The touch, The BCC has licensed ETECSA to operate as a non-financial entity and to provide collection and payment services through a mobile wallet “as part of the operation of the Transfermóvil platform, linked to a contracted cellular line, operating in Cuban pesos”.

Mobile wallet financial income may arise from phone balance and magnetic cards linked to bank accounts.

The central bank decision clarifies that virtual money for a mobile wallet can be used for corporate purchases where the Transfermóvil platform is enabled, for transfers between mobile wallets and in shipments to bank accounts.

In this way, the main mobile top-up balance can be transferred first to the mobile wallet and then to the magnetic card account to be withdrawn in cash from an ATM.

The memo states that among the requirements that the central bank requires from ETECSA to start operating a mobile wallet is the provision of the required infrastructure. In addition, a maximum balance of 5,000 Cuban Pesos has been set for the wallet and a transaction limit of 1,500 Cuban Pesos.

Between July and September 2020, the US State Department imposed heavy penalties on the multinational financial services and insurance company American International Services (AIS) and Western Union (WU) to manage foreign currency remittances to Cuban military companies.

This means a serious reduction in the flow of raw MLC to the state corporation FINCIMEX, which receives foreign currency and hands over to citizens a CUP or MLC that only works to purchase items at certain establishments.

All this represents the exacerbation of the Cuban inflationary crisis which, according to the recommendations of the Paris Club, could be contained in something if the value of the peso was reduced to an approximate value of 40 or 50 kopecks per dollar.